Comprehensive Estate Plans exist to ensure that the right parties receive the intended assets at the proper times. This applies to Wills that go into effect upon a person’s death, as well as Trusts that can mandate a transfer of property at any time in the future.
As such, it is important to designate your intended Beneficiaries when creating an Estate Plan. These are the people or entities that will receive your assets at the stated time. However, this process can be more complicated than it at first seems. Some people may not be able to directly inherit property or they may need to pay taxes on assets that decrease their overall value.
As a result, Beneficiary designations in Georgia Estate Planning are an important part of providing for you and your loved one’s futures. Our seasoned attorneys at Nelson Elder Care Law can provide more information concerning this topic and help you to make the right choices for you and your heirs.
Generally, any party may be a Beneficiary to a Will or a Trust. However, there are limitations to this rule. While adults can fully inherit under most circumstances, children cannot directly inherit property. If a child is an heir under a Will, the court will order that a guardian take temporary ownership of that property and place it into a Trust. This can complicate the inheritance process and result in unnecessary fees and delays.
Naming a charitable entity as a Beneficiary in a Will may also result in unforeseen complications. Especially in older Wills, the charity may no longer exist upon your eventual passing. This could trigger a contingency under the Official Code of Georgia Annotated § 53-4-62, where a court will make an equitable decision concerning who will inherit funds if a charity is unable to take possession. As a result, Beneficiary designations in Georgia Estate Planning require making the proper choice at the time of the creation of documents as well as keeping the document updated to ensure your heirs can inherit.
Even if a party directly inherits as a Beneficiary in Georgia, they may not be able to receive the full benefit of that property. Two common causes for this are Estate Taxes and inheritance taxes. While Georgia no longer has an Estate Tax, many other states and the federal government still do, and citizens of other countries may need to pay these taxes if they inherit assets. This means that if a Beneficiary lives in a place that levies these taxes, this could decrease the overall value of the Estate.
One way to avoid these complications is to limit the value of an Estate that goes into effect through a Will. Placing assets into a Trust that distributes property after your eventual passing decreases the overall value of an Estate. In addition, the Beneficiaries of Trusts may not need to pay taxes on the value of property through a gift tax exclusion. However, they may still need to pay income taxes on the receipt of cash.
A major part of Estate Planning is choosing the parties that will receive your assets. This can occur upon your death or at any point in the future. However, your loved ones may not be able to directly inherit property or could face difficult tax questions depending upon where they live or the value of your Estate.
Our team at Nelson Elder Care Law can help in making proper Beneficiary designations in Georgia Estate Planning. This includes identifying Beneficiaries, explaining how laws may affect their ability to inherit, and how these choices may leave the Estate vulnerable to taxation. Call us today.
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